Indian Stocks Rebound From Three-Month Low as ICICI Bank Rallies

Indian stocks advanced, with the benchmark index rebounding from a three-day loss, as ICICI Bank Ltd. and Maruti Suzuki India Ltd. rose on better-than-expected earnings.

ICICI Bank, the top private lender by assets, surged the most since September 2013 after Chief Executive Officer Chanda Kochhar allayed concerns over bad loans. Maruti Suzuki rallied to a record, while Bharat Heavy Electricals Ltd., a producer of power equipments, climbed the most in two weeks. Mobile-phone operators Bharti Airtel Ltd. and Idea Cellular Ltd. advanced before their quarterly results later on Tuesday.

The S&P BSE Sensex rose 0.8 percent to 27,396.38 at the close, the most since April 6. The gauge has fallen 2 percent in April and is headed for a second monthly loss amid concern company earnings growth will slow. The index’s valuation fell to 15 times projected 12-month profits on Monday, the cheapest since January, data compiled by Bloomberg show.

“The correction has given some opportunities in sectors like banking where there is growth anticipated over the next 12 months,” Lancelot D Cunha, chief executive officer at ITI Wealth Management Pvt., said in an interview with Bloomberg TV India today. “From an investment perspective, we are far more reasonably valued today.”

This month’s slide pulled the Sensex below its 200-day moving average for the first time in 15 months. The gauge’s 14-day relative strength index was 31.5 yesterday, near the threshold level of 30 which investors see as a signal to buy.

ICICI jumped 8.1 percent, the most since Sept. 5, 2013. The lender tumbled to a six-month low on Monday after posting the lowest quarterly profit growth in five years as bad loans increased. The March quarter “was probably the peak in terms of restructuring and non-performing assets,” Kochhar said in a conference call with reporters.

‘ICICI Assurance’

“The ICICI management sounded very confident that their asset-quality issues have peaked,” Nitin Kumar, a Mumbai-based banking analyst at Prabhudas Lilladher Pvt., said by phone on Tuesday. “They also guided that loan growth will improve from here. These were the assurances that everybody was looking forward to.”

Maruti Suzuki rallied 4.8 percent, taking the year’s gain to 15 percent. Bharat Heavy climbed 2.9 percent and Tata Motors Ltd., owner of Jaguar Land Rover, increased 2.5 percent. NTPC Ltd., the largest power producer, gained 2.1 percent.

Five of the seven Sensex members that have so far posted results for the March quarter have beaten or matched estimates.

Bharti soared 2.5 percent. Its net income probably surged 54 percent to 14.8 billion rupees ($232 million), according to the median of 17 analyst estimates in a Bloomberg survey.

Idea Cellular is projected to post a 41 percent increase in quarterly profit to 8.31 billion rupees, according to a separate Bloomberg survey. The shares jumped 3.3 percent.

Global investors sold a net $114 million of local shares on April 24, paring this year’s inflows to $8.3 billion. They purchased $16 billion of stocks last year.

Before it's here, it's on the Bloomberg Terminal.